Gov. Proposes Flat School Aid, but Wants Agreement on New Funding System within 100 Days

posted Mar 1, 2017, 9:26 AM by MEPS Google Admin.

In his final budget address, Governor Chris Christie on Tuesday proposed a total of $13.8 billion in education funding for 2017-2018, with approximately $9.2 billion going to direct aid to schools.

During a conference call with the state’s education organizations prior to the budget address, Acting Commissioner of Education Kimberley Harrington said that no school district will receive less in aid in 2017-2018 than it did this year. (See school aid chart.)

School districts receive their individual state aid notifications within two days of the Governor’s address. Local school districts must use these state aid numbers in budget development.

School Funding Reform In his address, Christie ripped the current school funding statute, the School Funding Reform Act of 2008 (SFRA), as unsustainable. And he called for the Legislature to take quick action on developing a new school finance system.

“…in the last few months I have finally heard the leaders of the legislature admit what I’ve been saying for eight years – this system is unfair and broken,” he said in his remarks as prepared.

“I pledge to work with the leaders of the legislature to come up with a new funding formula. Everything is on the table. No idea out of bounds for discussion. I am willing to work with you to solve this problem without any pre-conditions on the ideas brought to the table.

“However, here is my one requirement to offering compromise. 100 days,” he said. “We have 100 days to get this done.”

Meaning of 100-Day Timeline It was not clear if the Governor intends for a new formula to be in effect for the 2017-2018 school year, or if he simply wants to reach an agreement with the Legislature within 100 days. A 100-day timeline, however, would bring agreement on a new formula past the deadlines for finalizing 2017-2018 school budgets (May 12 for most districts) and striking school tax rates (May 19).

Nonetheless, Christie made it clear that his intention was to have a new school funding system ready before he leaves office next January.

“I want to act with you. But, if forced, I will act alone. But it will be fixed before I leave this town,” he said.

Last June, Christie proposed a new system, termed the “Fairness Formula,” which would base school aid on a single per-pupil allotment, regardless of community wealth.

Calls for change have come from both sides of the aisle. Senate President Steve Sweeney wants to maintain the SFRA, but address funding inconsistencies resulting from the fact that the act’s funding formula has not operated for a number of years.

NJSBA: Must Serve All Students “Once again, local school districts face another year of flat funding, a situation that does indeed warrant a long, hard look at the state’s school finance system,” said Dr. Lawrence S. Feinsod, NJSBA executive director. “Operating costs don’t remain flat. It is difficult to sustain programs with flat funding year in and year out.

“Any change to school funding must be implemented in a rational and fair manner,” he continued. “A school funding system must recognize the educational needs of all students. And it must recognize a community’s ability to pay for its schools.

“There should never be ‘winners’ and ‘losers’ when it comes to the lives of children.”

Pension/Benefit Funding Christie’s budget also increases state contributions to the state’s pension systems. State funding for the Teachers’ Pension and Annuity Fund will increase by $411.5 million to a total of more than $1.5 billion. State contributions to teachers’ post-retirement medical benefits will increase by $69.6 million, to an amount close to $1.2 billion.

Christie addressed the state’s long-term pension problem by proposing the dedication of lottery revenue to the state funds.

“The contribution would have the immediate effect of reducing the unfunded liability of the pension system by approximately $13 billion, and would increase the funded ratio of the pension system by almost 15 percentage points in one fell swoop, from 49% to 64%,” he said.

“This would also significantly reduce the amount we have to pay into the pension system every year out of the general fund.”

In addition, the Governor called for extension of the health benefit reforms adopted by the State Health Benefits Program’s plan design committee to other state-operated health programs. In her pre-budget address telephone conference, Acting Commissioner Harrington said that adoption of the reforms by the School Employees Health Benefits Program would save $43 million.